Branding Citigroup's Consumer Business

Branding Citigroup's Consumer

Business

By:

Ross Brannigan (Master in Marketing Management)

January 28, 2008

Q1.

The creation of an appropriate branding architecture which supported the complexity of Citigroup and its organizational strategy is a key issue for management at Citigroup following the company's merger with Travelers Group. Given the extent of the various financial services which it provided (banking, investing and insurance), it was also necessary to develop a brand portfolio strategy which coherently represented the unique segments of its target market in terms of its corporate and individual consumers under the umbrella of a corporate brand. The decision to plan and execute any branding architecture also needed to be made within the context of the group's overall strategy which aimed to capture a 'market defining share of the world's wealth and transactions'. Furthermore, the construction of an adequate architecture lends itself to accomplishing this goal through relevance, differentiation, energy, leverage and clarity.

The specific architectures that the brand management team at Citigroup considered included a 'worldwide master branding model' which served to unite all brands under the umbrella of 'Citigroup'. In such a scenario, the Masterbrand should add value to the category of sub brands within the portfolio. This can be gauged by assessing whether or not the 'Citigroup' umbrella brand would add value to the individual, corporate and niche segments of the financial institutions customer base. Furthermore, are all the associations of the Masterbrand readily transferable and coherent to be positioned in banking, insurance and investment markets? This is a key question; in the case of Citigroup where the brand represents and evokes a sense of power, prestige and sophistication, it's logical to assimilate that such values will easily diffuse across the company's sub-brands and increase overall equity. Other criteria that should be considered in the context of Citigroup's situation allude to the credibility of the brand on both a national and global level and its ability to associate and communicate elements of prestige to corporate clientele and value to individual customers. Consideration also needs to be given to the visibility of the brand across global markets which provide value through global pre-eminence and economies of scales in terms of operational effectiveness and communicating the brand to both internal and external stakeholders.The development of such an approach encountered organizational hurdles in terms of the lack of consistency with which the brand was regarded amongst managers and achieving 'buy-in' to a forward moving and objective branding strategy was initially a huge challenge. Another drawback of the campaign was the issue of cost and some national branches questioned the necessity for brand at all.

Another important issue and potentially, counterproductive feature, is the fact that a masterbrand, representing Citigroups vast array of financial products, has the potential of limiting the brands focus in terms of specific products which may not appeal to consumers who do not associate with the brands core values. The brand has also the risk of stretching itself too thinly and being unable to maintain the core strengths of its business and communicate it's values. A similar scenario arose with internet giant 'Yahoo' in a situation that saw the company's products and brands providing scant relevance to corporate strategy and prompted the infamous 'peanut butter manifesto' memo from Senior VP Brad Garlinghouse, in an attempt to address issues at the company and reposition itself as a leader. In Citigroups case, the brand was considered to be a "mile but an inch deep".

The advantages of implementing an asymmetric model derive from the relationship between the endorsed brand and the endorser brand. A feature of the Citigroup brand in particular is its strong consumer presence in the U.S. and high esteem and knowledge in the context of the brand asset valuator and overall pre-eminence in the banking category. These brands have the independence to operate freely with the benefit of being implicitly related to a masterbrand yet the masterbrand has the risk of being 'contaminated' by any malpractice or negative connotations associated with the activities of the endorsed brands. In the case of Citigroup, the nature of the business models and operating activity of its brands are somewhat prone to financial scandals. Such an occurrence could directly damage and contaminate Citigroups masterbrand. Another implication for this approach is the necessity for continual investment which contributes to increased costs which may be prohibitive for implementing such an approach. However, this approach also has the benefit of synthesizing brand equities yet the cost of such an exercise can also be prohibitive.

Such a model would place all sub-brands under both Citigroup and Travelers brands in a portfolio; this concept is part of the 'house of brands' model which appears in the brand relationship spectrum. The benefit of this approach for Citigroups strategy is the focus which it provides to all consumer segments and allows the company to deliver on its strategic objectives of increasing market share and developing its global presence. Additionally, any new developments and innovations of its financial service products can be launched under separate brand identities. In such a scenario, the organizational brand benefits from association with innovation and the new product benefits from Citigroup's shadow endorsement. The focus and composition of Citigroups individual brands in this approach would enable the offering of a unique value proposition to each of its customer groups and deliver on the branding aspects of clarity, differentiation and leverage through the shadow endorsement of both Citibank and Travelers.

Some potential drawbacks of this approach include the potential for channel conflict arising between consumer and corporate finance segments and a brand strategy must be carefully crafted to avoid such conflict and provide differentiation amongst the customer base. Furthermore, the lack of a unified brand proliferating across groups and product lines can possibly entail a lack of synergy and 'sacrifices economies of scale' that are usually attributed with the leveraged use of a powerful brand.

Q2.

The brand management team should chose an asymmetric approach leveraging the brand equity of the master Citigroup brand and segregate brands according to respective segments in the financial sector (i.e. individual, corporate and niche segments).

Q3.

Implementing this choice offers many of the aforementioned advantages yet the organization must incorporate several key elements in order to successfully achieve the goals of this branding exercise. This involves bridging the gap between the transactional and relationship models of banking and adding emotional appeal to its services in addition to the functional benefits derived from existing products. Such considerations have the ability to drive successful profitability, growth and market share.

In consideration of the consumer segment, individuals are 'intimidated' by the Citigroup label and therefore the identity of this brand should maintain the element of 'citi' without directly referring to the holding brand in order to associate brand identity and communicate the value proposition. Yet on the other hand, the global pre-eminence and stature of the 'Citigroup' brand can be leveraged towards the benefit of corporate clientele. In terms of remaining brands within Citigroups portfolio both Travelers and Smith Barney warranted high-stature and should also be maintained in an asymmetric approach to target the existing segment of brand loyalist sin this segment. This strategy shy's away from the global monolithic approach of unifying the Citigroup brand in a blanket method which could benefit from economies of scale and operational efficiencies yet adds value to customers through its intimate and focused approach. This extends the branding objectives by going beyond rational appeal to a level of emotion that the brand management team consider to be somewhat underestimated. This attachment and added value, offers increased probability of cross-selling the groups products and services. Furthermore the chosen architecture is maintains the values of each respective brand and reinforces the brand promise with the seal of Citigroup.

Another pertinent factor is the value of the individual brands themselves. The asymmetric approach leverages the use of the most important brands (Citigroup, Travelers & Smith Barney) and no value is lost in the merger. Typically, a rebranding in the form of the 'branded house approach' would not only be costly to implement but the erosion of existing brand value would also be significant.

The objective of differentiating the brand itself is also achieved across the array of established and endorsed brands which serve the diverse needs of the organizations global customer base which is another facet that not only maintains the company's global market share but acts as a foundation for increasing market share and growth. Other ancillary reasons why the asymmetric approach is more effective for implementation at Citigroup in light of its core objectives are the cultural dimensions which separate the behaviour and mindset of stakeholders at each separate division of the financial services group. Each brand maintains its sense of identity and unique culture which is essential due to the fact that such cultures reinforce the strength of brands and also reduce the cost of educating and re-establishing cultures. Furthermore, this increases consumer engagement and employees are also instilled with values that have a sense of deep-rooted tradition which is otherwise unattainable within a limited timeframe. Thus the use of an asymmetric approach, wherein the Citigroup maintains a small set of strong brands and extends other brands with the core 'Citi' and 'Citigroup' branding, is optimal in this situation for the reasons given above in order to achieve higher global market share and growth. The approach also provides the relevance, distinctiveness, ubiquity, consistency and dynamism required of a brand that aspires to be global.

Exhibit 1.

Recommended Asymmetric Approach

Consumer Banking:

Citibank

Corporate Banking:

Citigroup

Niche Brands:

Solomon Smith Barney

Travelers